Bitcoin will ruin people

The people paying for this garbage and the businesses that are actually accepting Bitcoin as a means of payment are going to lose and lose big.

Contrary to it's wiki pages, it is nothing more than a Ponzi scheme. Here I'll tell you why. But first you have to understand some of it's concepts.

There is a limited amount of Bitcoins that can exist. ~21,000,000 in year 2140 at which time no new BTC will be created.

Bitcoins exist due to computers performing a calculation. Calculations become more difficult as more computing power becomes available by gaining more adopters. Thus it becomes harder for someone to create Bitcoins as more people try to create them.

Bitcoins are created by computers at a rate setup so that more Bitcoins are produced early with fewer and fewer Bitcoins created as time goes on. Basically year 1-4 produces the most bitcoins (with easier calculations); Year 5-8 produces half the bitcoins as the previous 4 years; Year 9-12 half as many as years 5-8....

You have early adopters with large pools of 'free BTC' and new adopters either converting USD (or services and goods) to buy 'paid BTC' from some of these pools, or attempting to create new 'free BTC.'

However, these new adopters are dealing with scarcity. Not as many BTC are 'created' as before. And there is increased competition (due to larger numbers of adopters) to create these fewer BTC.

So, you've got 2 classes of people: The early adopters (probably the creator and his buddies being the largest holders) pooling BTC. New adopters paying real tangible assets (USD, goods, and services) to be a part of the "future of currency."

So how is this a Ponzi scheme?

Early adopters with large sums of 'free BTC' convince new people to adopt (and they're doing a great job of this.) As more and more adopters join in, it becomes harder and harder to get 'free bitcoin.' So, real assets are traded for 'paid BTC' for new adopters to get into the BTC market.

So what you have now is few people at the top that haven't really created anything receiving real assets from new adopters. Eventually, the only way for the newest adopter to not lose is to convince someone else to get into the market and so on and so on. That is exactly like a Ponzi scheme.

Imagine a world 10 years from now with only Bitcoin and no paper money:

You have 100 hacker types living in their mother's basement in year 2005 at the top of the bitcoin world with 1000's of Bitcoins. You have 30,000 adopters getting into the market in 2013 with 10 bitcoins. You have 6 billion other people that have no idea what a bitcoin is until 2023 who now have bitcoin as the means of trade.

This last group are the people that produce everything you consume. (Food, entertainment, shelter, healthcare.....) yet only earn fractions of a bitcoin. 0.00000035 for a triple bypass so the surgeon makes 0.00002865 BTC for the year.

The basement hacker guys become the new Rockerfellers and Hearsts, yet never produced a damn thing. Those 6 billion people will not let this happen.

This is why Bitcoin will eventually be worth zero. So all of you guys buying into this, or thinking about it, know that this will be worthless. DON'T GAMBLE YOUR WEALTH AWAY ON SOME PONZI SCEME.

Well, for one thing, it's not a Ponzi scheme. It doesn't meet the definition of it at all. You can go look it up yourself. Bitcoin is in no way a Ponzi scheme. So basically, whenever anyone calls it that, I know that they haven't really done any investigation and instead have relied on histrionic rants they've read elsewhere on the internet.

But beyond that, how is he wrong:

He uses the early adopter argument as something negative.

What he doesn't acknowledge or perhaps even understand is that early adopters are the ones that built the network. They invested valuable resources in it, such as hardware, skills, time, and electricity consumption. They did not get "free" bitcoins.

But not only that, why shouldn't early adopters benefit? Do people who bought Apple stock early get vilified because they took a risk on something they believed in?

re: Bitcoin will ruin people (Posted on 3/29/13 at 6:42 pm to WikiTiger)

quote:your opinion has been noted. it's wrong

I have nothing against the idea of the digital currency with no ties to a government. Philosophically I lean in favor of many things 'anti government'. But the whole concept of a currency that becomes exponentially scarcer as more and more people adopt it is is essentially trading one ruling class (current government) for another (early adopters).

re: Bitcoin will ruin people (Posted on 3/29/13 at 6:44 pm to Tigershatebama)

quote: But the whole concept of a currency that becomes exponentially scarcer as more and more people adopt it is is essentially trading one ruling class (current government) for another (early adopters).

only in a very extreme theoretical sense. in practice, the above quote is pure nonsense.

re: Bitcoin will ruin people (Posted on 3/29/13 at 6:46 pm to WikiTiger)

quote:He's saying that people that took a risk and adopted early will be better off than those that didn't? Sounds like how the world works to me.

ding, ding.

if i bought apple stock at $10 and sold it to you at $100 a few years later, nobody would have a problem with that. then if you sold it to someone else at $101 the next day, guess what, still no problem.

re: Bitcoin will ruin people (Posted on 3/29/13 at 6:51 pm to WikiTiger)

quote:Which made absolutely no sense. In one sentence he says triple bypass surgery will cost .00002865 which means that 1 bitcoin will be worth a significant amount of money.

Then he says bitcoin will be worth zero.

You need to read between the lines here man. The entire part that the 6 billion 'bitcoin peasants' will not allow this is how it becomes worthless. The largess of the world's polpulation will not tolerate having a few early adopters be essentially trillionaires and buy up the world's assets. They'll simply adopt some other form of currency, and thus make bitcoins worthless.

re: Bitcoin will ruin people (Posted on 3/29/13 at 6:56 pm to jcole4lsu)

quote:if i bought apple stock at $10 and sold it to you at $100 a few years later, nobody would have a problem with that. then if you sold it to someone else at $101 the next day, guess what, still no problem.

And Apple produces goods that people want. Using bicoin to buy groceries is like trading Farmville crops for gallon of milk